'Big 3' game giants post record earnings in Q3

By Lee Min-hyung

The so-called “big 3” game giants here have reported record sales in the third quarter on the steady popularity of their hit titles.

NCSOFT, the second-biggest listed game maker here, has particularly surprised the market by posting its largest-ever quarterly sales of 727.3 billion won ($648.85 million) in the July-September period. This is triple growth compared to the previous quarter.

The earnings surprise came on the back of the robust sales from the firm’s mega-hit “Lineage” intellectual property. Its latest version, “Lineage M,” which was launched in June, is a mobile version of the online role-playing title.

Observers pointed out the outstanding success of “Lineage M” enabled the company to successfully revamp its business structure by reducing its reliance on PC games and increasing its footing into the mobile sector. “Lineage M” reported 542.8 billion won in quarterly sales.

“Lineage M allowed the company to enhance the firm’s identity as a mobile game giant,” Meritz Securities analyst Kim Dong-hee said. She said the company still has huge growth potential until next year ahead of the game’s planned launch in Thailand in early December.

Netmarble Games, the largest game company here by market capitalization, has also posted decent sales of 581.7 billion won during the same period, up 62 percent from a year earlier.

Netmarble’s earnings are neck and neck with Nexon which reported 615.1 billion won in quarterly sales, the largest in its history.

Both companies are also drawing keen market interest as they are highly likely to top 2 trillion won in 2017 yearly sales for the first time in the nation’s game industry.

Nexon attributed its growth to the continuous popularity of its hit titles, including “Dungeon & Fighters” and “FIFA Online 3.” The company has so far stabilized its revenue structures by adopting localization strategies for the two hit titles in China and Korea, respectively.

The two companies are in a fierce rivalry in terms of sales, but their major revenue source is totally different. While Netmarble generates most of its revenue from its mobile titles, Nexon is still relying much on the aforementioned PC games.

“The fourth-quarter earnings will depend on the potential success of our planned launch of Lineage 2: Revolution in North America and major European countries,” a Netmarble official said.

The company is also seeking to tighten its mobile leadership by unveiling its massively multiplayer online role-playing game, “Tera M,” at the end of this month. Nexon, for its part, also aims to expand its mobile presence by launching its turn-based mobile role-playing title, “OVERHIT,” on the same day.